Coronavirus banking: How to defer a home or business loan repayment
Big banks are allowing Australian homeowners and businesses to pause loan repayments during the coronavirus pandemic. SEE HOW YOU CAN APPLY HERE.
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Big banks are stepping in to lend a helping hand to homeowners and businesses struggling through the coronavirus crisis — rolling out deferrals on loan repayments for the next six months.
Banks including Commonwealth, Macquarie, Westpac, NAB, ANZ, Suncorp and ING have installed new financial hardship measures and cuts to interest rates as millions of Australians are forced out of work and into growing Centrelink lines to apply for JobSeeker payment programs by the federal government.
Existing big-bank clients can apply directly to their banks — which remain open during government lockdowns — to defer their home or business loans for up to six months, without the deferral being considered as a default on repayments.
Westpac Group’s acting chief executive, Peter King, said the banks were “determined to assist customers through this extraordinary period”.
“This is a once in a lifetime event and a united response by government, regulators and corporate Australia is exactly what we need,” Mr King said.
Westpac also introduced a $10 billion home lending fund, which will work to get more people into homes across the country.
A Macquarie spokesman said new immediate support measures have been made available to homeowners and businesses, with “all Macquarie Business and Personal Banking clients who are experiencing financial difficulty can immediately defer their repayments for six months”.
“This applies to all commercial loan, overdraft, home loan, car loan and credit card clients,” the spokesman said.
NAB chief executive, Ross McEwan, told customers they could also apply for deferral of their repayments on a range of loans for six months.
“Our focus is clear – to support our business and personal customers with their financial needs when they need it most,” he said.
CBA chief executive, Matt Comyn, said 76,000 businesses would be auto-enrolled into loan deferral arrangements as part of the banks new measures to combat coronavirus.
“These are unprecedented times, and we will continue to take decisive actions to support households and the small business community,” Mr Comyn said.
On top of the deferral of loans for banking customers, ANZ chief executive, Shayne Elliott said the bank will also donate $1.5 million to charities including The Smith Family, The Brotherhood of St Laurence and the Financial Counselling Foundation to support people struggling through the coronavirus.
“Many Australians who were already doing it tough before COVID-19 will need additional help to get through this crisis,” he said.
“Our charity partners are experts in their respective fields and are best placed to make sure these funds are distributed where they will make the biggest difference.”
From March 23, Suncorp Bank allowed a deferral of repayments for small businesses struggling through the pandemic, with chief executive, Lee Hatton, telling customers the bank will have a fast-track approval process.
While an ING spokesman said customers had the option of three or six month deferrals.
Lenders provide different options when it comes to covering the cost of deferrals once clients are bank on track, including loan terms being extended so repayments don’t increase or monthly repayments being adjusted over an agreed period of time.
On March 19, the Reserve Bank of Australia took extraordinary steps to prop up the Australian economy when it cut interest rates ahead of schedule — with the official cash rate now sitting at a historic low of 0.25 per cent.
Lenders including ANZ and Reduce Home Loans made the decision to pass on the unscheduled rate cut by 0.15 and 0.10 per cent respectively.
This comes after the majority of lenders passed on a 0.25 per cent rate cut on March 3.